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UK Data    

• Monday 12.01am Rightmove House Prices for October previous 9.6%y/y ACTUAL 10.4%y/y
• Tuesday 9.30am CPI for September previous 1.8%y/y
• Wednesday 9.30am Average Earnings for August previous 3.5% 3m avg.
• Wednesday 9.30am BoE release minutes from prior MPC meeting.
• Thursday 9.30am Retail Sales for September previous 4.9%y/y
• Friday 9.30am GDP for Q3 previous 3.1%y/y

Sterling finished last week trading slightly softer against both the Euro and the Dollar in the wake of signs of further weakness in the UK housing market. The RICS survey (-14.6) showed prices fell at their fastest pace in two years during September and the outlook for sales was the weakest in 4½ years. Nevertheless, PPI Input (6.4%y/y) and Output (2.7%y/y) showed that inflation remains a concern even though producers seems to be absorbing the extra costs at this stage. This week, attention turns to CPI and average earnings where the market will be looking for signs that inflationary pressures will prevent the MPC from cutting rates in the months ahead.

US Data

• Monday 1.30pm EmpireState Survey for October previous 14.7
• Tuesday 2.00pm Treasury Capital Inflows (TICS) for August previous 19.2
• Tuesday 2.00pm Industrial Production for September previous 0.2%m/m
• Wednesday 1.30pm CPI for September previous -0.1%m/m
• Wednesday 1.30pm Housing Starts for September previous 1.331m
• Wednesday 7.00pm Fed to release Beige Book.
• Thursday 5.00pm Philly Fed Survey for October previous 10.9

The focus last week was on the release of the Fed minutes from last month’s meeting where they cut rates by 50bps. The minutes indicated that the Fed were trying to be proactive in an attempt to minimise any major slowdown in the US economy. They also highlighted the primary concern was still the housing market which continues to slow. Nevertheless, retail sales (+0.6%m/m) exceeded expectations showing that not all is bad in the US economy and PPI (+1.1%m/m) showed that inflationary pressures are still rife. Therefore, the main highlight this week will be Wednesday’s CPI figure for further signs that inflation will continue to provide a dilemma for the Fed. 

EU Data   

• Tuesday 10.00am German ZEW (Economic Sentiment) Survey for October previous -18.1
• Tuesday 10.00am EU HICP for September previous 2.1%y/y
• Thursday 10.00am EU Trade Balance for August previous €4.6bn

Despite the absence of any key data last week, the Euro continued to outperform against both Sterling and the US Dollar. There were signs that the European economy remains robust when GDP for Q2 was unrevised at 2.5%y/y and industrial production exceeded the consensus forecast coming out at 1.2%m/m. This week, the main highlight will be Tuesday’s inflation data where the market will look for any signals that the ECB will remain on their tightening path in the months ahead.

Interest rate outlook